AG MOBILE
FREE E-MAIL NEWSLETTER
Log In
Last week, the major grain markets put in new 2-year highs, before getting weekly reversals down, with corn and beans seeing an outside week lower. Selling was prominent as traders moved to the sidelines to wait out the important crop reports that will be released Wednesday morning.
USDA is slated to release their monthly supply/demand report, the final small grain summary (production), the quarterly stocks report and the winter wheat plantings report on Wednesday morning. The trade is anxious to get the numbers out, as there are many questions to be answered, particularly with corn. Corn supplies are still expected to show a 15-year low. Soybean yields are expected to be higher again following a very good harvest.
Winter wheat plantings are expected to be up about 3.6 million acres, with about 2.0 million more in soft red and 1.6 in hard red. While wheat supplies are basically at a comfortable level, it’s still the amount of quality wheat that headlines the wheat story this year.
Speaking of which, values for hi-pro spring wheat surged this week as the generally tight supply situation was magnified by transportation delays across the northern plains. Heavy snows have stalled farmer movement and rail shipments, creating some very tight supply situations for mills that need the high protein wheat for blending. Values were reported up over $1/bu early in the week before stabilizing late in the week.
This is probably just a harbinger of things to come. Obviously, the mills are operating hand-to-mouth when it comes to the high protein wheat, and supplies will only get tighter as we move into spring when prices tend to peak seasonally. End users tend to do their buying for the summer in late spring which will cover their needs until the harvest rolls in, and is typically why prices tend to peak at that time.
According the U.N.’s World Food Program, global food prices hit all-time highs last month, surpassing the spike high from 2008. They reported that while cereals including rice had not yet hit the 2008 level, sugar and meat prices were at their highest since its records began in 1990. During 2010, wheat prices rallied 47% after a drought in Russia, low quality crops in the US and Canada, and then floods in Australia. US corn was up 50% and soybeans jumped 34%.
